Resistance to Petrobras price controls leads to the downfall of Mines and Energy minister

The Minister of Mines and Energy, Admiral Bento Albuquerque, could not resist another arm wrestling for the control of fuel prices by Petrobras.

In his place, economist Adolfo Sachsida, one of Bolsonaro’s first allies at the beginning of his campaign, in 2018, is now the special secretary of the Ministry of Economy.

Officially, aides to the minister say he resigned.

Reports from Planalto advisers, however, claim that Bolsonaro was irritated by the latest diesel price adjustment, of 8.87%, which raised the price for truck drivers, one of his main bases of support that had been threatening to break with the government due to prices.

With the increase, the average price of fuel in refineries went from R$ 4.51 to R$ 4.91 per liter.

Bolsonaro delivered a package of goodies for the category, but, among the promises, he was unable to hold the price of fuel, which led truck drivers to signal a landing.

Also according to advisers, Bolsonaro spoke with the minister on Tuesday (11) and Bento resisted any type of intervention in Petrobras’ pricing policy.

The president then decided to dismiss the minister. The dismissal and appointment of the new head of the portfolio was published in the Official Gazette this Wednesday (11).

Bento’s relationship with Bolsonaro had been strained for a long time and reached its apex in April, when the minister -to serve the president- accepted to remove General Joaquim Silva e Luna from the command of Petrobras by the economist.

In his place, Bento appointed economist Adriano Pires, a consultant in the oil and gas sector whose name ended up being barred by the oil company’s recruitment policy.

The president blamed Bento not only for the unsuccessful nomination of Adriano Pires for the presidency of Petrobras, but also for the proposal to postpone the meeting, which later changed the composition of the company’s board.

The wear and tear ended up on the minister’s account, who, according to Bolsonaro, could not have endorsed the name of Adriano Pires – a name close to politicians in the center, the government’s base of support in Congress and which serves companies in conflict of interest with the government. Petrobras.

Bento then suggested the name of José Mauro Coelho, who was already part of Petrobras’ board of directors and, therefore, would be approved to be president of the company.

The homemade solution worked. However, Zé Mauro, as he is known in the market, took on reinforcing the commitment to the company’s pricing policy, indicating that he would not give in to pressure from the Plateau for the control of readjustments.

Bolsonaro’s first attack against him came shortly after the company’s results were announced in the first quarter of this year, a record profit for the period of R$ 44.5 billion.

Shortly before the result was released this Thursday (5), Bolsonaro said in his weekly live that Petrobras’ high profits are a “rape” and that a new adjustment in fuel prices could break the country.

“We appeal to Petrobras: ‘do not readjust the price of fuel’. You are making an absurd profit. If you continue to make a profit this way and increase the price of fuel, Brazil will break”, said the president.

The state-owned company’s high profits are the target of criticism from both the government and the opposition, given the rise in fuel prices in the country. On the other hand, the fuel sector, which complains that the high lag generates a risk of shortages in the market.

For Bolsonaro, signaling a price control will be fundamental in his reelection campaign. Political advisers have detected that it will be necessary to hit Petrobras and signal that the president is on the consumer’s side.

A Datafolha survey showed that 68% of Brazilians believe that the president is responsible for the rise in inflation that has been fueled basically by the increase in fuel and energy.

The Ipesp institute also showed in a recent survey commissioned by XP that 83% of Brazilians prefer to vote for a more interventionist candidate at Petrobras.

Bolsonaro agreed to stretch the rope with the company and the Ministry of Mines and Energy in pursuit of re-election. The result of this tug of war was the dismissal of Bento Albuquerque.

Adolfo Sachsida, who will take charge of the portfolio, was one of Bolsonaro’s first supporters, when he was still an inexpressive candidate.

It was up to him to recruit staff for the team. Sachsida, then at IPEA (Institute of Applied Economic Research), went out to consult specialists to put together a government plan. The military arrived later.

With the arrival of Paulo Guedes for the campaign, which convinced the business community to embark on Bolsonaro’s program, Sachsida remained the president’s faithful squire and was appointed Secretary of Economic Policy with the promise of, in the future, receiving a position with ministerial status – what had recently happened with his promotion to special secretary for the economy.